"I guess about two years ago we rolled out a 5GB-a-month service. Since then, roughly six months ago, we rolled out a 30GB-a-month service across the entire footprint, and if you buy that service you can save about five bucks a month off the unlimited product," Marcus said.

Marcus argued that the 30GB product is a good deal even though few people want it. "If you take the 30GB a month and compare that to median usage, which is high 20s, let's say 27GB a month, that would suggest that a whole lot of customers would do well by taking the 30GB service. Notwithstanding that, very few customers, in the thousands, have taken the usage-based tier. I think that speaks to the value they place on unlimited," he said.

Another likely reason is that $5 a month isn't enough of a discount to justify the risk of a data meter, particularly as Internet services become more bandwidth-intensive. TWC charges $1 for every extra gigabyte, "not to exceed $25 per billing cycle," the company says. That means three months of heavy Internet usage could more than wipe out a whole year's worth of savings.

The good news, Marcus said, is "we plan to offer unlimited for as far out as we can possibly see. I think that the concept of 'use more pay more, use less pay less,' is an important principle to establish. So notwithstanding the low uptake of usage-based tiers, I think it's a very important component of our overall pricing philosophy."

TWC is in the process of being purchased by Comcast for $45.2 billion. Comcast has been moving aggressively toward usage-based billing, so Time Warner's approach could change after a merger. On the other hand, US regulators could theoretically require TWC to continue offering unlimited plans as a condition of the merger.

Marcus also briefly discussed customers avoiding modem lease fees by purchasing their own equipment. About eight percent of customers are doing that. "We're comfortable either way," he said.

He was also asked about competition from Google Fiber. "We take them seriously. They're a real competitor," he said. "Although the numbers are very small, it's an attractive product and simply by virtue of the fact that they don't have the incumbents' baggage and they have the Google brand. They're real guys we have to pay attention to."

Customers in Kansas City and Austin are lucky that TWC is paying attention to Google Fiber. Time Warner has increased speeds and deployed Wi-Fi products more aggressively in those markets to compete against Google, Marcus said.

For communities that have no competition, there isn't as much incentive for TWC to improve service. The Comcast merger won't change that. As Marcus noted, TWC and Comcast don't compete against each other in any US city or town.

Promoted Comments

I was paying my TWC bill the other day, and noticed that they had a "view your data usage" tool. It appears that in the last two years I have used an average of 800 GBs/month. I'll stick with the unlimited plan, thanks.

When ISP's describe those who use a lot of data, they're sucking the life out of the system for ordinary users, driving up the price for everyone, and permanently destroying modern capitalism. Poor Granny only uses 3 MB a year, like she should, but she has to pay tens of thousands of dollars more for Internet service because of the few greedy bastards. But then when they want to offer a discount to get your selfish, abusive data consumption in line with the rest of the world, it's $5? Really? I'd have thought given the very real threat these hogs pose to modern life, it would be more like 40% or even more.

It seems to me that the ISPs' own actions prove that there's very little cost difference between those who use the average and those at the high end of the spectrum. Or none - the infrastructure is sitting there waiting to be used.

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Time Warner: "We've concluded that our customers have no interest in choosing how to manage their data plan. Therefore, we've decided to make the 30GB limit manditory. We're giving customers what they want!"

That's because it's only $5 a month off the monthly bill which is probably in the $40-$60 range (assuming it's bundled). Nobody's going to go for that when they have the potential of incurring overage charges that exceed these "savings." Now, if they cut the bill in HALF for that amount of data, they'd probably see a much larger adoption rate.

I was paying my TWC bill the other day, and noticed that they had a "view your data usage" tool. It appears that in the last two years I have used an average of 800 GBs/month. I'll stick with the unlimited plan, thanks.

Time Warner: "We've concluded that our customers have no interest in choosing how to manage their data plan. Therefore, we've decided to make the 30GB limit manditory. We're giving customers what they want!"

I'd say "don't give them any ideas" but have this sneaking suspicion that this is exactly what they have planned.

That's because it's only $5 a month off the monthly bill which is probably in the $40-$60 range (assuming it's bundled). Nobody's going to go for that when they have the potential of incurring overage charges that exceed these "savings." Now, if they cut the bill in HALF for that amount of data, they'd probably see a much larger adoption rate.

I'd say it'd be better if they capped the 'overage' charge at $5. A user then could save the 5 bucks a month but if he/she were to have a heavy month or two, it wouldn't impact them financially.

I don't know if I share their conclusion. Mine is that 5$ is inconsequential to most people in light of their total bill and it is not enough to motivate them to go through the effort of doing something. Try cutting their internet bill in half and see if the customers still lust for unlimited data.

Edit: Ninja'd by Deadlius. However, I don't think the majority of users (mom and pops) would even consider the possiblty of overage charges. Those that are aware and keen to those would probably not change no matter what the offer as it doesn't jive with their self-aware usage trends.

When ISP's describe those who use a lot of data, they're sucking the life out of the system for ordinary users, driving up the price for everyone, and permanently destroying modern capitalism. Poor Granny only uses 3 MB a year, like she should, but she has to pay tens of thousands of dollars more for Internet service because of the few greedy bastards. But then when they want to offer a discount to get your selfish, abusive data consumption in line with the rest of the world, it's $5? Really? I'd have thought given the very real threat these hogs pose to modern life, it would be more like 40% or even more.

It seems to me that the ISPs' own actions prove that there's very little cost difference between those who use the average and those at the high end of the spectrum. Or none - the infrastructure is sitting there waiting to be used.

I struggle to stay under my 300 GB on comcast. I couldn't fathom having only 30 GB. That's nuts. The limits should be getting larger for the same money, not smaller. The google fiber shows that the only thing that will bring down costs and increase caps is competition. We need true competition in all of our cities, not just the big ones that are easy to hook up.

"The good news, Marcus said, is "we plan to offer unlimited for as far out as we can possibly see."

Since any merger with Comcast would involve not just 1-2 year projections and plans, but 5-20 year plans, I say that if the FCC DOES let this farce proceed, it should at least require TWC to continue to offer unlimited broadband at a reasonable rate. This country does not need more help preventing the evolution of our virtual infrastructure.

Marcus also briefly discussed customers avoiding modem lease fees by purchasing their own equipment. About eight percent of customers are doing that. "We're comfortable either way," he said.

And this is the perfect example why these companies can get away with so much. Financially speaking, it would take less than a year to recover the cost of buying your own modem when compared to leasing it. Yet so few people do it.

Marcus argued that the 30GB product is a good deal even though few people want it. "If you take the 30GB a month and compare that to median usage, which is high 20s, let's say 27GB a month, that would suggest that a whole lot of customers would do well by taking the 30GB service.

...er, assuming that median usage never goes up? Which is a pretty weak assumption, honestly.

"Save $5/month for a year; pay through the nose for the rest of your life!!!!" </worstPitchEvar>

I struggle to stay under my 300 GB on comcast. I couldn't fathom having only 30 GB. That's nuts.

++

Try having a teenager who buys Steam games (there is 30 gig), streams twitch.tv and netfix (all at the same time) for 6+ hours a day. We have really been getting close, or exceeding, that 300 gig cap just about every month for the last 6 months.

Marcus also briefly discussed customers avoiding modem lease fees by purchasing their own equipment. About eight percent of customers are doing that. "We're comfortable either way," he said.

And this is the perfect example why these companies can get away with so much. Financially speaking, it would take less than a year to recover the cost of buying your own modem when compared to leasing it. Yet so few people do it.

I bought my own, but will probably have to go back to leasing one since they intentionally fucked around with the setting in my modem so that all the ports are blocked and unopenable.

And to think, soon these guys will be joined up with Comcast spreading this same thinking over vast swaths of the cable/ISP market. Let's also not forget that the majority of these customers have few any alternative broadband ISP choices.

Marcus also briefly discussed customers avoiding modem lease fees by purchasing their own equipment. About eight percent of customers are doing that. "We're comfortable either way," he said.

And this is the perfect example why these companies can get away with so much. Financially speaking, it would take less than a year to recover the cost of buying your own modem when compared to leasing it. Yet so few people do it.

True.I paid $65 for my DCM-315R back in 2003, and it's still in use today.

That said, when I switched from WOW to Insight back in 2007, Insight gave me a DCM 425 that's still in the box in my closet.

The only way people lease modems these days is if the cable company sees you as a sucker instead of a customer.

Anyone who grew up with dial up or even 'the boards' knows that metered will run you into the ground when you least expect it. Younger Generation knows it will be using that connection for nearly everything so caps don't make sense.

I was paying my TWC bill the other day, and noticed that they had a "view your data usage" tool. It appears that in the last two years I have used an average of 800 GBs/month. I'll stick with the unlimited plan, thanks.

Comcast has data caps for residential customers which is why I am no long a residential customer and instead went to the business class for a temporary period while waiting for another company to get to us with their 1GB fiber to the home roll out, there are no data caps on Comcast business class. Its not that I used a lot of data because I don't really, but because they started counting my Netflix streaming against the data cap. Anyway, while still residential class there was a month and a half period where we did not use our service at all, were not even in the state, and the home computers and network was powered off as was the cable modem. Somehow during that time the Comcast data usage meter showed three times the data usage that I used on a monthly basis and they charged me for going over the data cap.

I was paying my TWC bill the other day, and noticed that they had a "view your data usage" tool. It appears that in the last two years I have used an average of 800 GBs/month. I'll stick with the unlimited plan, thanks.

I was paying my TWC bill the other day, and noticed that they had a "view your data usage" tool. It appears that in the last two years I have used an average of 800 GBs/month. I'll stick with the unlimited plan, thanks.